Last Updated on 30th January 2025
The economic forecasts for 2025 are somewhat lacklustre, but there remain investment opportunities in almost any market. As always, selecting the optimal products and monitoring performance alongside potential returns is paramount.
We often reiterate that it is impossible to predict market movements with absolute certainty, but 2025 may present a range of viable investment options for global expats, both those keen to reinvest or restructure their portfolios and those newer to cross-border investment.
Here we’ll highlight some of the fastest-growing investment sectors in the year ahead, the types of investments in strong demand, and why each is gaining traction with investors around the world.
An Overview of Economic Forecasting for the 2025 Period
The year just gone was characterised by political uncertainty, market volatility and spikes in interest rates, none of which are often ideal from an investment perspective. However, some of the conventional evergreen markets have outperformed expectations, while new and emerging investments continue to drive excitement.
For the 12 months ahead, the consensus is that most markets will be on a more even keel, with fewer fluctuations and uncertainty. Base rates will revert from record highs to more typical levels, thus providing relief for investors plagued by low interest and returns.
Of course, that doesn’t mean there aren’t challenges to come or that we have more certainty than usual about what may happen.
The transfer of power in the US following Donald Trump’s election, for instance, is almost inevitably going to have marked impacts, particularly on domestic US markets, while emerging economies and markets may reach new levels of growth multiple times those of the developed markets.
In a year of steady, if slow, growth, it remains essential to assess your current and accepted risk exposure, make investment decisions with care, and ensure any choices you make align closely with your overarching investment targets and current portfolio.
Sustainable Markets and Green Bonds
Renewables and sustainable markets have been a hot topic for several years now. While some governments have pulled back a little from previously ambitious targets, and there are expected to be some ramifications following expected policy reversals in the US, they remain a good option.
The Russian invasion of Ukraine highlighted energy dependency in multiple economies. Countries are now striving to look at greener, sustainable, and home-grown alternatives to develop better energy independence for the future—alongside meeting global and domestic carbon reduction targets.
Green bonds have been around for some time and provide far greater diversity now than ever, both as part of sustainable investment portfolios and for investors keen to diversify by selecting varied fixed-income securities around the world, improving returns over market cycles and safeguarding capital.
Commodities as a Diversification Option
Commodities like gold and, notably, copper provide investors with alternatives to equity investment, either to offset more risky investment products, shore up an unbalanced portfolio, or to provide a hedge against the potential that more highly geared investments will result in a loss.
Copper is due to become increasingly attractive in 2025 due to a deficit in supply, growth in demand, and greater reliance on it in electrical engineering, construction, and structural applications.
Gold is also tipped to be a solid selection to mitigate the risk of setbacks or downturns prompted by reforms to US policies. Even during periods of high inflation and geopolitical upheaval, these commodities have remained buoyant, with easier-to-predict returns in a more stable market.
Non-US Equity Investments
Analysts and economists have indicated that non-US equities may currently be undervalued, which means that strategic investment can lock in better returns or higher transferable asset values for the future.
Even though US equity markets have reacted positively following the outcome of the presidential election, there remains the considerable risk that deregulation and cuts in corporate taxation could change this – making alternative equity markets more attractive from a risk management standpoint.
Fixed-Income Investment Markets
Fixed-income investments are often seen as safe bets. In an environment where there may be variable levels of volatility, this safety and the assurance of a known and predetermined return can be beneficial as a risk mitigation exercise.
Most fixed-income products offer fairly generous interest rates in comparison to the open market, which can offset longer-term products within your portfolio that remain linked to low returns.
Bonds are anticipated to provide returns above the average in the year ahead and create a level of certainty and assurance in longer-term investment portfolios, particularly if equity markets become subject to greater fluctuations.
Global bonds are forecast to return rates of between 4.5% and 5.5%, with UK bonds gauged to return between 4.3% and 5.3%. With the European and US economies thus far dodging any indications of a sustained recession, this curve isn’t expected to change dramatically.
Property and Real Estate Investment
Our final area to consider is property—whether expatriates investing in real estate as part of their relocation planning or as an investment strategy in rental, holiday, buy-to-let, or commercial accommodation.
For example, regions within the central London market are expected to start outperforming other areas in the UK for the first time in a decade, which could influence investment decision-making, alongside judgements about whether to sell or retain assets during an overseas move.
The largest real estate value growth internationally is expected to be seen in Scandinavia and European cities like Madrid and Milan, around the Middle East, and throughout several US states – specifically Phoenix, Portland, and Atlanta.
Bespoke Financial Advice in Selecting 2025 Expat Investment Opportunities
Each of the investment areas mentioned has excellent potential for growth in the year ahead – but as always, the right products, funds, risk exposure and investments are personal decisions that can have a considerable impact on your financial future.
Chase Buchanan recommends seeking independent wealth management guidance before selecting any investment products and relying on professional support to analyse the potential returns and establish whether there are more competitive opportunities available elsewhere.
Any new market or investment space carries a varying level of uncertainty, so a portfolio review is the best way to quantify whether current assets are underperforming, presenting a potential to reinvest in an alternative scheme, product, market or jurisdiction with a positive outlook.
Please contact Chase Buchanan at your convenience for tailored advice in selecting the right 2025 expat investments aligned with your broader goals and expected returns.
*Updated January 2025